MarketLife Ep 32 – Technicals for the non-technician

In this episode, I look at basic technical tools that anyone, regardless of background or previous experience, can use to enhance his or her trading program. Important concepts and tools are covered, along with some ideas for how to expand your learning and learn to do this yourself.

Technicals vs Fundamentals

  • Frequency of data
  • Difference in intent (true value / behavior)
  • Both only address probabilities

Biggest points

  • Consider learning to short
  • How do you size positions?
  • Technical factors force you to deal with the market as it is right now.
  • Be careful of indicators. Many of them measure the same thing.


  • Many ways to measure trend/define trend
    • Three trends
  • Trend depends on timeframe
    • Your timeframe depends on who you are and how you invest
  • What does trend mean?
  • How to use trend?
    • Don’t fade a trend

Overbought / Oversold

  • Rubber band concept
  • Statistically verifiable tendency
  • Stronger on some asset classes (stocks)
  • However, trends get more and more overbought/oversold
  • Some indicators measure this

Price behaving badly

  • Price behavior shows emotion
  • Wide range bars
  • Gaps
    • Why are there gaps?
  • Extended thrusts

Price rejection: where mistakes were made

  • Price “doesn’t want” to be there—quick snap back
  • What does this look like?
    • Tails on candles
    • Up/Down or Down/Up bar pairs with wide range

How to get started?

  • Decide what tools to use and change them slowly
  • Write down prices
  • Chart by hand
  • Do research

The link to the free trading course I mentioned is here .

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Enjoy the show:


Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.